Corn Markets Under Pressure – Profit-Taking and Political Uncertainty Weigh on Prices
Corn Markets Under Pressure – Profit-Taking and Political Uncertainty Weigh on Prices
Corn markets weakened for a second consecutive session on Wednesday. The March contract at CBOT lost 6.75 ct to 484.25 ct/bu (183 EUR/t), while the March contract at Euronext fell by 1.75 EUR to 214.50 EUR/t. Profit-taking and political uncertainty weighed on the markets.CBOT: Profit-Taking Pulls Corn Prices LowerAfter last week’s strong gains, the correction in corn futures at the Chicago Board of Trade (CBOT) continued. The March 2025 contract dropped by 6.75 ct/bu (-1.37%) to close at 484.25 ct/bu (approximately 183 EUR/t). Other contracts weakened as traders locked in profits and anticipated potential rainfall in Argentina.
Euronext: Weak US Cues Drive LossesCorn futures at Euronext mirrored the softer US market. The March 2025 contract declined by 1.75 EUR (-0.81%) to close at 214.50 EUR/t. European markets followed the CBOT’s downward trend amid global uncertainties.
Market Drivers:
- Profit-Taking After Recent Highs: Following a strong rally to over one-year highs, traders took profits, leading to a pullback in prices.
- Weather in Argentina: Reports of potential rainfall in Argentina’s drought-stricken regions added pressure, despite concerns about ongoing heat and dryness.
- Political Uncertainty in the US:
- The nomination of Brooke Rollins as U.S. Secretary of Agriculture by Donald Trump raised eyebrows. Rollins has previously criticized ethanol mandates and agricultural subsidies, which could face opposition from lawmakers in key agricultural states.
- The U.S. biofuel policy remains in focus, caught between the interests of the oil and corn lobbies, creating uncertainty for the corn market.
Background on Ethanol Policy:During his first term, Trump promoted corn-based ethanol by allowing the year-round sale of E15 (gasoline with 15% ethanol). However, he also expanded waivers for small refineries, exempting them from blending requirements and angering the biofuel industry. Rollins’ nomination could significantly influence the future of ethanol and agricultural policies in the U.S.
Outlook:Corn markets are likely to remain volatile, driven by political developments and weather conditions in South America. Market participants will closely monitor Brooke Rollins’ confirmation hearing and potential signals regarding future U.S. agricultural and biofuel policies.
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